Shanghai Star interviewed Tsuyoshi Hashiba, the hotel's general manager, and Wu Longfei, deputy general manager and instrumental in negotiating entitlement for Japanese investors to establish the hotel in 1984.

The old part of the Garden Hotel is a magnificent building in classic brick and lime plaster. Originally, the building was the base for the third generation French Club before 1939.

Sun Shufen (whose pen-name is Shufen), a Hong Kong-based Chinese writer, said in his book "The Last Dreams of Old Shanghai," published last year: "The French Club, established in the 1920s in old Shanghai, employed quite different policies from the American Club and the English Club in its decision on whether to accept Chinese members."

The writer came from a well-off family and as such had the opportunity to frequent many places in Shanghai prohibitively expensive to most Chinese people at that time.

Sun adds in his book: "Their special concept of ‘hospitality' which included accepting Chinese members - only the rich and powerful of course - made the French Club the most popular foreign club in town at that time."

The French styled their club on the same Art Deco aesthetics as they did all their other buildings in the former French Concessions.

Artistic details like the "naked lady" above the fireplace, the wall decorated with wooden dadoes and trimmed with fine cornices and the elliptical and sunken dance floor with an ingeniously designed spring floor, have all proved to be enduring attractions to French and other tourists alike.

Between 1939 and 1949, the building and the large green garden were used to entertain American armies. Since the founding of People's Republic of China, it was used as the People's Cultural Palace until, at a later date, Chairman Mao Zedong chose to stay here when visiting Shanghai.

Pioneer co-operation

In September of 1985, Shanghai Jinjiang Group, supported by the government, signed a co-operation agreement with the Japanese-based Nomura Securities Group to establish the hotel on site of the former French Club.

After careful examination, Japanese architectural company Ohbayashigumi found that many structures of the French Club had been seriously damaged and put forward plans to knock it down, said Deputy General Manager Wu, who acted as an interpreter for the Japanese architects during the negotiations.

The Shanghai government, however, insisted on it being renovated and later commissioned the East China Architectural Design Institute to do the job, said Wu.

Ohbayashigumi then designed the modern extension to the French Club which became the major part of the Garden Hotel Shanghai.

The old French and modern architectural styles form a striking contrast.

Asked why the Shanghai government chose to co-operate with Nomura and establish a joint venture hotel in such a prime location, Wu said: "It was actually a landmark hotel marking the government's new welcome of foreign investors."

Nomura, Japan's leading securities' dealer, had long been interested in tapping the China market since reform started in 1979.

It was very active in persuading more Japanese enterprises to invest in Shanghai.

"Mr Wang Daohan, mayor of Shanghai at that time, suggested Nomura itself make certain investment in Shanghai to reassure other Japanese investors," said Wu. "And out of that was born the Garden Hotel Shanghai."

Good old days

At the beginning of the 90's, there were very few hotels of international standard in Shanghai.

Business for the Garden Hotel Shanghai and its limited number of competitors - Jing'an Hilton, Sheraton Huating and later, Portman Shangri-La Hotel - experienced a golden age.

"This wave of prosperity for all hotels in Shanghai starting from 1992 prompted many hotels to quickly put up their prices," said Wu.

But the Garden Hotel Shanghai didn't change terms with its long-time customers. According to Wu, the hotel didn't negotiate its price increase with customers until January 1993.

"Business therefore peaked for the Garden a little later than in many hotels in Shanghai, but lasted until 1995 because of its good reputation," said Wu.

In 1995, when business in many hotels started to decline, the Garden Hotel Shanghai achieved its highest average room rent of $148.65.

The hotel was badly hit by the Asian financial crisis, however. "The Garden had a lot to lose because a larger proportion of our customers came from Japan," said Tsuyoshi Hashiba, the fourth general manager of the hotel.

Hashiba said it was a challenging period through which to manage the Garden with the onset both of the Asian crisis and also intensified competition in the Shanghai hotel industry.

"There are now many hotels in Shanghai, and there are more on the horizon," he said.

"I don't want to reduce the prices, but the market seems to be demanding it."

Prices were reduced to an average of $121.3 in 1998, some $27 lower than its peak price in 1995.

"But I think price is not the only key to success," said Hashiba, a veteran of the business and well known among his staff for the personal inspection he carries out every day in the lobby.

With its beautiful garden in the heart of downtown Shanghai and intriguing history to match, Hashiba is confident the hotel can continue to be a success.